Grade 12 NSC Accounting (English) Answer Book 2015 Prepartory Examination Answer Book_hlayiso.com_.pdf

Downloaded from hlayiso.com GAUTENG DEPARTMENT OF EDUCATION PREPARATORY EXAMINATION 2015 10710 ACCOUNTING ANSWER BOOK Pages 21 Name QUESTION POSSIBLE MARKS MODERATOR MARKS 1 35 2 45 3 65 4 70 5 50 6 35 TOTAL 300 4 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 2 ANSWER BOOK 10710/15 GAUTENG DEPARTMENT OF EDUCATION PREPARATORY EXAMINATION – 2015 ACCOUNTING ANSWER BOOK QUESTION 1 1.1.1 List TWO reasons for preparing the Bank Reconciliation Statement as an internal control process. 2 1.1.2 State the adjustment that would be made to the figures on the financial statements on 30 June 2015 in respect of the post-dated cheques issued. Refer to the Bank Reconciliation Statement for June 2015. Include actual figures in your answer. 4 1.1.3 ITEM CRJ CPJ NO ENTRY Item 1 21 370 Item 2 Item 3 Item 4 Item 5 Item 6 Item 7 Item 8 Item 9 9 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 3 ANSWER BOOK 10710/15 1.1.4 Bank reconciliation statement on 31 July 2015 Debit Credit  7 1.1.5 In August 2015 the internal auditor discovered that the outstanding deposit of R20 500 on the Bank Reconciliation Statement on 31 July 2015 appeared as R5 500 on the Bank Statement. (Item 3) The amount on the Bank Statement is correct. List ONE concern that you have as internal auditor. Provide ONE suitable control measure to prevent this from happening in future. Explain fully. CONCERN CONTROL MEASURE 3 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 4 ANSWER BOOK 10710/15 1.2.1 Why should the balance of the Creditors’ control account correspond with the total of the Creditors’ list? 2 1.2.2 Calculate the correct balances of the Creditors’ control account and the Creditors’ list. Creditors’ Control Creditors’ list Incorrect total/balance 49 560 36 410 (a) (b) (c) (d) Balance / Total 8 35 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 5 ANSWER BOOK 10710/15 QUESTION 2 2.1 Match the description from COLUMN B to the concept in COLUMN A. Write only the letter (A–E) next to the question number (2.1.1–2.1.4) in the ANSWER BOOK. 2.1.1 2.1.2 2.1.3 2.1.4 4 2.2 Calculate the correct Factory Overhead Cost. FACTORY OVERHEAD COST Incorrect Factory Overhead Cost 362 790 Factory Overhead Cost for the Year 10 2.3 WASTE TRADERS PRODUCTION COST STATEMENT FOR YEAR-ENDED 30 JUNE 2015 Prime costs Factory overhead cost (see 2.2) Work-in-process (beginning of the year) Total manufacturing costs Work-in-process (end of the year) Cost of production of finished good 12 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 6 ANSWER BOOK 10710/15 2.4 Calculate the following: 2.4.1 SELLING PRICE PER UNIT: 3 2.4.2 COST OF SALES: 3 2.4.3 VARIABLE COSTS PER UNIT 3 2.4.4 BREAK-EVEN POINT 4 2.5 Waste Traders anticipates that demand will increase in the next financial year to 600 000 units. They aim to increase the number of units produced to meet this demand. They expect fixed costs to remain unchanged. 2.5.1 Explain what you understand by the term “break-even point”. 2 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 7 ANSWER BOOK 10710/15 2.5.2 Explain the effect the above decision will have on the fixed costs per unit and the break-even point. FIXED COST: BREAK-EVEN POINT: 4 45 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 8 ANSWER BOOK 10710/15 QUESTION 3 3.1 Calculate the following 3.1.1 Cost of vehicle sold 3.1.2 Accumulated depreciation on vehicle sold. 9 3.1.3 Carrying value of vehicle sold. P.T.O.

Downloaded from hlayiso.com ACCOUNTING 9 ANSWER BOOK 10710/15 3.2 INCOME STATEMENT FOR THE YEAR-ENDED 30 JUNE 2015 Sales 2 840 200 Cost of sales (1 492 200) Gross operating income Operating expenses 35 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 10 ANSWER BOOK 10710/15 3.3.1 TANGIBLE ASSET NOTE Land and Vehicles buildings Carrying value (beginning of the year) 11 000 000 Cost 11 000 000 900 000 Accumulated depreciation 0 (390 000) Movements Carrying value at the end of the year 10 200 000 Cost 10 200 000 810 000 Accumulated depreciation 0 7 3.3.2 ORDINARY SHARE CAPITAL Authorized Shares 1 000 000 Ordinary shares Issued Shares 550 000 Shares in issue 3 025 000 7 3.3.3 RETAINED INCOME Balance on 30 June 2014 255 274 Ordinary share dividends  (255 000) Balance on 30 June 2015 7 65 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 11 ANSWER BOOK 10710/15 QUESTION 4 4.1 Choose one word/term from the following to complete the sentences given below: 4.1.1 4.1.2 4.1.3 4.1.4 4 4.2 XOLISE TRADERS LIMITED 4.2.1 Reconciliation of net profit before taxation and cash generated by operations Net profit before tax 1 283 100 Adjustments i.r.o. Depreciation (42 000 + 23 000) 65 000  Interest paid 42 600 Operating profit before change in working  capital 1 390 700   Increase in inventory (139 600)    Cash generated by operations 12  4.2.2 Calculate the total tangible assets purchased 5 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 12 ANSWER BOOK 10710/15 4.2.3 Cash Flow Statement on 28 February 2015  130 200 Cash Flow from Operating Activity (check operation) Cash Generated from Operations 1 306 100 Interest Paid (42 600) Dividends paid (843 000) Repayment of loan (30 000) Net Change in Cash and Cash Equivalent Cash and cash equivalents at the beginning of the year 38 600 12 Cash and cash equivalents at the end of the year 4.2.4 Calculate the following on 28 February 2015 Earnings per share (EPS) 3 Dividends per share (DPS) 4 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 13 ANSWER BOOK 10710/15 Net Asset Value per share (NAV) 3 The Return on average capital employed (ROTCE) 8 Debt equity ratio 3 4.2.5 Briefly comment on the liquidity of the company. Quote TWO financial indicators to support your answer. 4 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 14 ANSWER BOOK 10710/15 4.2.6 What major decisions by the directors are reflected in the Cash Flow Statement? State TWO decisions and quote the relevant figures. Also explain how EACH of these decisions would benefit the company in future. Decision and figures Benefit for company 6 4.2.7 The company is slow in repaying the loan. Explain why this is a good decision. Quote TWO financial indicators with figures to support your answer. 6 70 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 15 ANSWER BOOK 10710/15 QUESTION 5 5.1.1 Why is it necessary to prepare a cash budget? It is a financial plan indicating projected receipts and payments to ensure that there is sufficient cash to meet payments  1 5.1.2 Why does depreciation and profit on sale of asset not appear in the Cash Budget? They are non-cash items.  1 5.1.3 Name TWO items other than depreciation and profit or loss on sale of asset which will appear in the Projected Income Statement but will not be included in the Cash Budget. Cost of sales, Discount received, Discount allowed, Trading Stock deficit, Bad debts. Any two correct answers  2 5.1.4 Debtors’ Collection Schedule for February 2015. CREDIT SALES PER MONTH JANUARY FEBRUARY November 57 000 8 550 December 57 500 17 250 8 625  January 56 000 26 600 16 800  (if one part correct) February 54 600 - 25 935  (check operation) TOTAL RECEIVED 52 400 51 360  8 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 16 ANSWER BOOK 10710/15 5.1.5 CASH BUDGET OF VARIA TRADERS FOR JANUARY AND FEBRUARY 2015 CASH RECEIPTS JANUARY FEBRUARY Cash sales 168 000 Cash received from Debtors 52 400 Rent income TOTAL RECEIPTS CASH PAYMENTS Payments to creditors 81 000 Sundry expenses New assets purchased 25 315 Salaries and wages 61 600 TOTAL PAYMENTS Bank (opening balance) (19 000) 20 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 17 ANSWER BOOK 10710/15 5.2.1 Briefly explain how the preparation of a Debtors’ collection schedule and a Debtors’ age analysis could help Gary to control the accounts of Debtors. How the preparation of a Debtors’ collection schedule could help to control the accounts of Debtors: Any valid answer  How the preparation of a Debtors’ age analysis could help to control the accounts of Debtors: Any valid answer  4 5.2.2 Average Debtors’ collection period (in days) for the financial year (i) ending 30 June 2015. 4 5.2.2 Briefly explain whether Lu would be satisfied with the collection (ii) period. Provide a reason for your answer. 2 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 18 ANSWER BOOK 10710/15 5.2.3 Refer to information C and D. From the information, identify ONE problem the owner is faced with from the Debtors’ Age Analysis and ONE from the Debtors’ control account. Quote information and figures to support your answer. Provide ONE solution to each of the problems. DEBTORS’ AGE ANALYSIS PROBLEM SOLUTION DEBTORS’ CONTROL ACCOUNT PROBLEM SOLUTION 8 50 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 19 ANSWER BOOK 10710/15 QUESTION 6: 6.1.1 Calculate the stock values that will appear in the Balance Sheet. Show all workings using the number of units and the appropriate unit value. Leather jackets (use the weighted average method) 5 Handbags (use the FIFO method) 5 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 20 ANSWER BOOK 10710/15 6.1.2 Calculate the following for the handbags: Cost of sales      COST OF SALES  7 Gross profit 3 Mark-up % achieved 3 6.1.3 Skin suspects that a number of handbags have been shop-lifted. Calculate the number of bags stolen. 3 P.T.O.

Downloaded from hlayiso.com ACCOUNTING 21 ANSWER BOOK 10710/15 6.2 Identify ONE problem in relation to each branch, quoting figures/amounts to support the problem. In each case, offer the owner advice on how to solve the problem. Branch Comment and figures Advice Soweto Thembi Kagiso Diane Hillbrow Karabo 9 35 TOTAL: 300 marks END